"We reduced international surcharges in October and we have been monitoring oil prices closely since then," Mr Borghetti said.

"With the more recent fall in the price of jet fuel, we can now extend the surcharge reduction to domestic fares, as well as make further reductions on a number of our international routes."

Mr Borghetti said Qantas would continue to monitor oil prices and refining costs, which remained a major issue for Qantas and the wider aviation industry.

"Despite hedging and surcharges, we are still under-recovering the cost of fuel price increases by hundreds of millions of dollars, even with the recent drop in jet fuel prices," he said.

Mr Borghetti said Qantas would also reduce its Frequent Flyer points option, for Frequent Flyers electing to use their points to pay for taxes, levies and charges on domestic Australian and New Zealand Award flights, by 500 points from 23 January.